Lead author Prof Robert Howard, of the Institute of Psychiatry at King's College London, said: "For the first time we have robust and compelling evidence that treatment with these drugs can continue to help patients at the later and more severe stages of the disease.

"We observed that patients who continued taking donepezil and memantine were better able to remember, understand, communicate and perform daily tasks for at least a year longer than those who stopped taking the drugs."

With donepezil, "it's as if the clock has been turned back four months" in terms of cognitive symptoms, and three months in terms of functioning, he said.

He added: "These treatments are symptomatic treatments, they don't actually slow down the rate of Alzheimer's disease - they are not a cure.

"But the improvements in symptoms they produce are important to patients, caregivers and those of us who look after the patients."

Aricept cost around £2.50 per patient per day but is coming off patent and new generic versions are around 40 pence per patient per day.

The study published in the New England Journal of Medicine examined patients taking donepezil and memantine also known as Ebixa. Patients were randomly assigned to receive both, a combination of one and a dummy pill, or a double placebo.

Two tests were conducted at the start of the trial on cognition and memory and the other on ability to complete daily living tasks such as dressing and shopping.

The tests were repeated regularly for the next year. It was found that those taking donepezil showed a benefit on the cognition test of the equivalent of stalling the progression of the disease for four months and on the daily living tasks of the equivalent of three months.

This result was significant in the trial but the authors said was large enough to translate into a noticeable real life benefit for patients and their carers.

Although there was no benefit shown in the trial of taking both drugs together, the authors said this was probably because the trial was not big enough and in clinical practice they would recommend the drugs be taken in combination.

Currently guidance from the National Instittute for Health and Clinical Excellence says donepezil should be continued while there is benefit but in practice many areas restrict its use in what campaigners have called a 'postcode lottery'.

Prof Clive Ballard, director of research at the Alzheimer's Society and co-author, said: "Thanks to donepezil, tens of thousands of people in the early to moderate stages of the condition are able to recognise their family for longer, play with their grandchildren and make vital plans for the future.

"This major new trial now shows that there could also be significant benefits on continuing the treatment into the later stages too. There are 750,000 people with dementia in the UK yet currently prescription levels of Alzheimer's drugs are still low.

"This research – if acted upon – has the potential to change the lives of up to 450,000 people today and many more in the future.

"It could mean many more people being able to stay on the drugs or accessing the drugs. It also adds vital weight to the argument that a diagnosis of dementia is essential.

"Only then can people be given the opportunity to try these drugs, which could bring real benefits into the later stages of the disease."

He said Alzheimer's was a savage disease and those in the late severe stages have a life expectancy of around two years.

Giving those people three or four months of better function would be a 'big hit', he said.

Currently people in the late stages of the disease are often put on anti-psycotic drugs to control restlessness, agitation and aggression but these shorten their life whereas keeping them on donepezil for longer would avoid those behaviours and prolong their lives, Prof Howard said.

A statement from the National Institute for Health and Clinical Excellence said: "NICE guidance on the use of donepezil and other acetylcholinesterase inhibitors does not include any specific recommendations on when to discontinue their use.

"Instead it says that treatment should only be continued while the drugs are 'considered to be having a worthwhile effect on cognitive, global, functional or behavioural symptoms'. So, if the drugs are still providing patients with benefit, then NICE guidance supports their continued use, subject to their licensed indications.”